]]>Australian residents and some visitors on student or work visas have Medicare coverage to provide payment for their hospital treatment expenses. If you already have Medicare coverage, you may be uncertain of why you would also need to purchase private health insurance cover. The reality, however, is that there are many important benefits of obtaining private health insurance for yourself and for any dependents that you are responsible for.

What are the Benefits of Private Health Insurance?

A few of the many benefits of private health insurance include the following:

You can avoid being hit with lifetime health cover loading.

You can avoid a Medicare levy

You will be able to get medical care quicker and not have to endure a long wait for treatments that you need.

You will be able to have a broader choice of providers and not be limited only to getting minimal services at public hospitals.

You can have coverage for other types of medical treatment besides hospital care.

You can control your medical costs and save money if you end up needing any type of routine or ongoing medical care.

Once you understand the benefits associated with buying private health insurance, it becomes clear that this is a purchase that makes a lot of sense.

Avoiding Lifetime Health Cover Loading

In order to encourage the purchase of health insurance at a young age, you are assessed a penalty if you wait too long. If you do not purchase private hospital insurance by the 1st of July following your 31st birthday, you will be assessed lifetime health cover loading when you do buy a policy.

Lifetime health loading means you pay two percent more in premiums for your insurance for each year over the age of 30. If you are 40 when you finally buy coverage, you will have 10 years of a two percent penalty so will pay 20 percent more for insurance coverage than you would have had you been covered the entire time. This guide to lifetime health cover loading explains more about what LHC is and why you want to avoid it by buying private insurance early.

Avoiding a Medicare Levy

If your individual or family income exceeds a certain level and you do not buy hospital insurance coverage, you are assessed a Medicare Levy Surcharge. This calculator provides information on how much you will need to pay.

Medicare Levy Surcharge Calculator

The Medicare Levy surcharge is an additional fee paid on top of the 2% Medicare Levy Surcharge that most Australian taxpayers pay. You can avoid the surcharge if you have Private Health Insurance (Hospital Cover).

The exact surcharge level you'll need to pay depends on your income level and relationship/family status. Use the slider and dropdown menu below to determine what surcharge you're liable for if you don't have private hospital cover.

Step 1: Select Your Annual Income:

Step 2: Select Your Life Stage

Please select status

Your Medicare Levy Surcharge is 1% of your income, or $2050

SinglesFamilies

$90,000$180,000

$90,001-105,000$180,001-210,000

$105,001-140,000$210,001-280,000

$140,001$280,001

Medicare Levy Surcharge

Standard

Tier 1

Tier 2

Tier 3

All ages

0.0%

1.0%

1.25%

1.5%

For individuals with incomes between $90,001 and $105,000, there is a one percent Medicare Levy Surcharge, which means that you end up paying an additional one percent of your income in taxes because you opted not to buy private health cover for hospital treatment. Families with income between $180,001 and $210,000 are also hit with this one percent surcharge. The surcharge only goes up from there, with those in the highest income brackets assessed a tax of 1.5 percent of income. Because of the costs associated with not having coverage, it makes a lot of financial sense to buy a policy.

You Can Avoid A Long Wait for Care

If you do not have private insurance coverage, you may need to wait a long time for non-essential services. For things like knee replacements, cataract treatment, hip replacements, tonsillectomies and varicose vein treatments, you can expect to wait hundreds of days. You may be in pain and your activities will be restricted as you wait to get treatment. If you want to ensure this doesn’t happen to you, you should have a private policy that will provide you with coverage for prompt treatment. Many private health insurers impose a waiting period of up to 12 months before certain services are covered, so you should get private health insurance before you need treatment so you can get help immediately when a medical problem develops.

You Can See More Providers

Medicare is going to cover certain treatments at public hospitals according to the Medicare Benefits Schedule (MBS). If a provider doesn’t accept Medicare or if you want to go to a private hospital, you are not going to have any coverage unless you have a private health insurance policy. You don’t want to be restricted in the types or quality of treatments you get, especially if you have a serious medical issue. Having a private policy gives you much more choice about where you get treatment and who provides it.

You Can Get More Coverage

There are two types of private insurance: private hospital coverage and extras coverage. Extras are things like chiropractic care, occupational and physio therapy, and dental coverage. You may need some of these “extra” treatments in order to stay healthy and live a comfortable life. Medicare isn’t going to pay for any of the ongoing maintenance and preventative care you need so you are going to be forced to pay for everything out of pocket if you have no private insurance coverage.

You Can Control Medical Costs

Private health insurance coverage can limit the “gap.” This guide explains health insurance and the gap. The gap is the difference between the costs covered by your insurance and what actual medical expenses are. It refers to the amount paid out of pocket for services. Co-pays, excluded benefits or services, and payments to providers that are larger than the Medicare Benefits Schedule allows all fall within the gap.

If you buy private insurance, you can get more coverage, lower co-pays, and higher payouts for doctors and care providers who offer treatment. You pay for insurance premiums, which you can budget for, but don’t need to pay nearly as much out-of-pocket when you actually require medical services. This allows you to plan ahead and avoid uncertainty.

Get Private Coverage Today

The many benefits of private health insurance coverage should convince everyone to buy. Shop today for the right policy for your needs.

]]>When you first purchase private health insurance, there may be a waiting period before certain medical expenditures are covered. The law limits waiting periods for hospital services. However, there are no legal limits on how long you will need to wait if you buy extras coverage. It is important to understand what waiting periods mean for you and to shop carefully to find a health insurance fund that offers limited or no waiting periods if you need prompt treatment.

What are Standard Waiting Periods?

Waiting periods are a period of time after you buy coverage before the coverage kicks in to provide full insurance benefits. Waiting periods apply when you are buying private insurance for the first time, or when you allow your policy to lapse and then purchase a new policy after not being covered.

For hospital services, the law imposes limits on waiting periods. If you are buying a new policy or a policy after a lapse in coverage, the waiting period for pre-existing conditions and for pregnancy or obstetrics coverage is 12 months. The waiting period for accidents and ambulance service is one month and the waiting period for other hospital treatment is two months.

There are no standard waiting periods established by law for extras cover. Insurance companies have the choice to determine how long a waiting period should be before you get coverage for dental treatment, vision care, and other services covered by an extras policy.

Is No Waiting Period Health Insurance Available?

Some insurance companies will waive waiting periods. These insurance companies will specifically advertise that they offer “no waiting periods” or that waiting periods are waived.

Typically, when no waiting period health insurance is available, there are still restrictions. For example, you may be able to get coverage straight away for routine optical care or routine dental care but would not have immediate coverage for more expensive dental treatment.

Why do Waiting Periods Exist?

Waiting periods exist because insurance is supposed to protect you in case something happens. If there were no waiting periods, people could wait until they were sick or until they needed a particular medical service and could then sign up for insurance coverage. Insurers would not be able to stay in business if customers did this because insurers depend upon collecting premiums from healthy people to pay for those who end up needing medical services.

Can You Avoid Waiting Periods When Switching Policies?

The law does not allow a waiting period when you switch from one hospital policy to the other. Unless you buy a higher level of coverage with your new insurer, you should not have to wait and should immediately be able to access full benefits when switching insurers to a new hospital cover policy.

If you buy a higher level of coverage, a waiting period will apply before your additional benefits kick in. Your new insurer would provide the same level of coverage you had under your old policy straight away, and you would get access to the higher level of coverage after your waiting period is done.

There are no laws requiring insurers not to impose waiting periods when you switch from one extras fund to another. However, many insurers will waive waiting periods for extras cover when you get the same level of coverage. Insurers do this because otherwise many people would not switch policies since they would not want to have to wait months to get the same coverage they had before.

How to Shop for No Waiting Periods Health Insurance

When you shop for hospital insurance and you are changing policies, you shouldn’t have to worry about whether a new waiting period will be imposed if you buy the same level of hospital coverage. You can count on immediately having the same coverage you had because of rules established in 2007 by the Private Health Insurance Act.

However, if you are buying a higher level of hospital coverage or if you are switching to a new extras policy, be sure to carefully review the policy terms to understand what the waiting periods are.

If the policy is advertised as “no waiting periods health insurance,” find out exactly what types of coverage you get immediate access to. You likely will only get immediate coverage for routine or preventative care expenses and not for more advanced treatment.

Where Can You Learn More About Waiting Periods?

This guide to private health insurance and waiting periods explains waiting periods in greater detail so you will know what to expect as you shop for policies. You can also use this calculator to determine what your waiting periods are likely to be before you become eligible for different types of coverage.

Health Insurance Waiting Period Estimator

You will have to serve a waiting period when you start a new private health insurance policy or increase your level of cover. A waiting period protects members of the fund by ensuring that individuals aren't able to make a large claim shortly after joining and then cancelling their membership. This kind of behaviour would result in increased premiums for all members.

Use this calculator to choose a hypothetical date in the future (or leave it on the default setting, which is today's date) to determine when you will be covered for various types of coverage.

Select Your Policy Start Date:

Most health insurance funds will apply the following waiting periods to new members taking out a hospital cover product:

(These are the maximum waiting periods allowed by law for hospital cover.) These waiting periods also apply to any additional benefits on your new product if you transfer to a higher level of hospital cover, with your existing fund or with a different fund.

Note: If you are moving to the same or a lower level of cover, you will NOT have to re-sit waiting periods.

Some funds also apply Benefit Limitation Periods for some types of treatment on some of their hospital covers.

Months

Standard Waiting Period

0

Accidents

Ambulance

2

Chiropractic/Osteopathic

Alternate/Natural Therapies

Dietetics

Eye Therapy

Hospital Treatment

Occupational Therapy

Pharmaceutical Perscriptions

Physiotherapy

Podiatry

Speech Therapy

General Dental

6

Optical

12

Orthotics

Major Dental

Pre-Existing Conditions

Pregnancy Related Services

Because waiting periods can limit your ability to get coverage right away for medical care, it is important to buy a policy early before you need medical help. Talk to an expert at Health Insurance Comparison about what policy and coverage level is right for you.

]]>Purchasing health insurance is a smart financial decision for many different reasons, but one of the many financial benefits associated with buying a policy is that you avoid the Medicare levy surcharge. The Medicare levy surcharge is assessed on people whose income is above a certain level and who have made the choice not to purchase private health insurance cover to supplement Medicare. If your income is high enough that you are required to pay the Medicare levy surcharge, you have a choice between buying health insurance coverage or paying an extra tax and putting yourself at risk for big health expenditures if you get sick and need care.

What is the Medicare Levy Surcharge?

The Medicare levy surcharge is a tax that people and families with higher incomes pay if they choose not to buy private hospital insurance coverage. The levy surcharge ranges from one percent to 1.5 percent of your income, depending upon how much money your family makes.

How Much Money Must You Make Before You are Charged a Medicare Levy Surcharge?

The income thresholds change periodically but as of 2015, the first income bracket at which you will be assessed a Medicare levy surcharge is $88,001 to $102,000 for individuals and $176,001 to $204,000 for families. This income level puts you into the “Tier 1” group, which means that you will pay an additional tax equal to one percent of your income if you choose not to buy private hospital insurance. The second income group, or those subject to the “Tier 2” tax make between $102,001 and $136,000 for singles or $204,001 to $272,000 for families. At this income level, your Medicare levy surcharge would be equal to an additional tax of 1.25 percent. Finally, singles who make $136,001 or more, or families with a household income of $272,001 or greater, will be subject to a 1.5 percent tax. Because the income levels can change, it is important to check what the current income levels are. This calculator helps you to determine whether you owe and the amount you owe based on how much you make.

Medicare Levy Surcharge Calculator

The Medicare Levy surcharge is an additional fee paid on top of the 2% Medicare Levy Surcharge that most Australian taxpayers pay. You can avoid the surcharge if you have Private Health Insurance (Hospital Cover).

The exact surcharge level you'll need to pay depends on your income level and relationship/family status. Use the slider and dropdown menu below to determine what surcharge you're liable for if you don't have private hospital cover.

Step 1: Select Your Annual Income:

Step 2: Select Your Life Stage

Please select status

Your Medicare Levy Surcharge is 1% of your income, or $2050

SinglesFamilies

$90,000$180,000

$90,001-105,000$180,001-210,000

$105,001-140,000$210,001-280,000

$140,001$280,001

Medicare Levy Surcharge

Standard

Tier 1

Tier 2

Tier 3

All ages

0.0%

1.0%

1.25%

1.5%

What Counts as Income for the Medicare Levy Surcharge?

The Medicare levy surcharge rate applies to all taxable income, as well as to total reportable fringe benefits. The rate also applies to any amount of money on which you must pay family trust distribution tax.

When Do You Need to Pay the Medicare Levy Surcharge?

You will owe the Medicare Levy Surcharge if your income exceeds the thresholds and if there was any period during the course of the year when you or your dependents did not have an appropriate level of private hospital insurance coverage. However, if you fit into any of the exemptions, then you will not have to pay the surcharge.

Does Any Private Health Cover Allow You to Avoid the Surcharge?

The Medicare levy surcharge is assessed if you do not have appropriate private hospital insurance coverage. This means that the health insurance must be provided by a registered health insurer. The policy must cover some or all hospital treatment in day hospitals or Australian hospital facility. The policy must have a maximum excess of $500 for a single’s policy and $1,000 for a policy that covers couples or families. If you have a policy that does not meet the requirements or if you buy extras cover but not private hospital insurance coverage, then you will be subject to the Medicare levy even if you have a policy in place.

Are You Subject to the Surcharge if You Have Coverage for Part of the Year or if Some But Not all Family Members are Covered?

You are subject to the Medicare levy surcharge for any period in which you did not have private hospital cover as required. This means you may be required to pay the surcharge for a portion of the year even if you had coverage during some periods of time. You will also be subject to the Medicare Levy if some of your family members are not covered by a qualifying policy. You, your spouse, and your children who are either under 21 or full time students may be required to have coverage in order for you to avoid the Medicare levy. You must maintain coverage for children under age 21 or under age 24 if they are full time students as long as the children are still classified as dependents.

How is the Medicare Levy Surcharge paid?

If your income makes you subject to the surcharge, the details about the amount that you are obliged to pay will be shown on your notice of assessment that you receive alerting you to what you owe in Medicare taxes. There will be a line on your assessment labeled the “Medicare levy and surcharge.”

Are There any Exemptions?

You are exempt from the Medicare levy surcharge if your income is too low. You are also exempt if you are a blind pensioner; if you were entitled to full free medical treatment under the Veterans’ Affairs Repatriation Health Card; if you were entitled to full medical treatment under the Defence Force Arrangements; if you received a sickness allowance from Centrelink; or if you were entitled to free medical care under a repatriation agreement. If you were a foreign resident of Norfolk Island, or if you are not entitled to Medicare benefits, then you are also not going to be assessed the surcharge.

How Can You Avoid the Medicare Levy?

You can avoid the Medicare levy if you purchase a qualifying private health policy. Buying hospital insurance is important not just to avoid this tax but also to ensure that you can get the care you need if you get sick and that it won’t cost you a fortune to get treated for your medical problems.

]]>The following letters are templates that you can modify and send to the Private Health Insurance Ombudsman (PHIO).

How they work:

Download the template letter that meets your requirements and open it with your word processor. Then input your personal information about your compliant within the brackets. Delete the brackets and instructions, and change the font colour from red to black to match the rest of the document. Important: Please remember to personalise your letter and provide enough detail about your specific situation so the insurance ombudsman can determine if you have a valid claim.

Template Letters:

Misleading Communications – This letter provides a template if your insurance company has provided misleading information to you in written or oral communications. Businesses, including insurance companies, are prohibited by law from making false claims or misleading statements either intentionally or unintentionally.

If your insurance company has provided incorrect oral advice, failed to keep promises kept in a benefits quote, or provided incorrect information on brochures, websites and notification letters, this letter helps you to make a compliant with the insurance ombudsman.

Benefits / Level of Cover – This template letter is provided as a sample complaint letter for use when contacting the Private Health Insurance Ombudsman regarding a benefits dispute.

Membership Issues – This letter provides a template if you have experienced membership issues with your insurance company including improper cancellation of a policy, inability to obtain a refund you are due, or difficulty obtaining clearance certificates.

Service Issues – This letter provides a template if you have experienced service issues with your insurance fund provider including administrative delays, customer service issues, or administrative delays.

If you experience service issues with your insurer, this letter makes it easier to file a complaint with the insurance ombudsman.

]]>In Australia, most people are required to purchase hospital coverage or will be assessed a Medicare levy. Many people also get a tax credit to help pay premiums. The purpose of hospital coverage is to pay for emergency medical treatments or treatments for serious medical conditions that require admission to a public or private hospital. The hospital coverage you purchase does not provide for day-to-day routine medical care that may be necessary to achieve optimum health.

Extras cover, or general cover, provides insurance coverage for the routine medical treatments that virtually everyone requires. It is important to consider whether purchasing extras cover makes sense for you or your family, or whether you would prefer to pay out of pocket for all routine treatments.

Why Do You Need Extras Cover?

For most people, the bulk of healthcare spending over the course of the year doesn’t come from a visit to a hospital. Instead, you pay for routine therapies. Extras coverage means that some or all of the costs of this routine care is paid for by your insurer. Extras policies may have substantial differences in the specific types of medical care that you can receive as part of the policy coverage. If you require a certain kind of medical care, you should be sure to ask the insurance company about whether policy you are looking at will provide that coverage.

What types of medical care do extras policies cover?

Some of the typical types of medical care that may be covered by an extras coverage policy include:

Chiropractic care – Relieving back and neck pain and other musculoskeletal conditions

Not every policy offers the same types of coverage. An insurer must provide a written statement of the types of extras cover that are included in your policy so you are prepared for what to expect.

What types of extras insurance are there?

Extras cover plans can be broadly grouped into three different levels:

Basic is the best choice for singles and couples who are relatively young and healthy and who do not consume a lot of medical services. For example, a basic policy may cover general dental services like a cleaning or filling a cavity but won’t cover braces, bridges, crowns or other more complex dental procedures. Benefits limits are lower for basic extra cover than for other policy types. For example, the average optical benefit may be set at $200 per person for basic cover, but $250 per person for medium or top cover.

Medium is typically the best choice for middle age people, as well as for families with young kids who have an average need for medical services. Medium cover is more comprehensive in terms of both types of cover and benefits limits compared with basic cover, but will not cover expensive procedures that top cover offers such as braces for kids. While basics policies may have combined limits for therapies, both top and medium cover typically have separate limits so the total amount of covered care is greater.

Top is often the right option for older people, families with children in school, and others with higher levels of health care consumption. Top cover provides the broadest types of benefits. While premiums are more expensive, you do not incur as many costs as you consume health care services throughout the year. You can also expect higher annual limits on coverage. For example, a medium policy provides $500 on average for hearing aids while a top cover policy provides an average of $800 for hearing aids.

In addition to choosing coverage levels, you can buy different types of extras cover depending upon your family situation. For example, you can purchase singles policies, couples policies, or family policies. Those in de facto relationships are eligible to purchase couples or family policies, as are people who are married.

What are the waiting periods for extras cover?

Waiting periods are set by law for hospital cover; however, this is not the case for extras cover. Extras coverage policies may have different waiting periods for various type of benefits. Some policies will provide specific types of benefits with no waiting periods when signing up for a policy. For example, a person who signs up for dental coverage may have immediate coverage for x-rays with no waiting period but will have a waiting period before certain more costly benefits like braces are covered.

When switching from one hospital policy to another, portability rules also forbid insurance companies from making you re-serve waiting periods. Again, these consumer protection laws do not apply to extras cover policies. However, the vast majority of insurers will not make you re-serve a waiting period if you switch to a new extras fund with the same level of cover as your old fund. If your new fund has more comprehensive coverage, you will have to serve a waiting period before getting the broader benefits.

Because waiting periods are not standardized by law when you purchase extras cover, you need to shop around among policies to try to minimize the time you must wait before necessary treatments are covered.

Are there benefit limitation periods?

To keep costs down, many extras policies impose benefit limitations periods on certain kinds of benefits. Benefits limitation periods allow you only a limited amount of coverage for a particular service when you first become insured. Over time, you earn more coverage.

For example, during your first year with a policy, you may only receive $500 in coverage for dental benefits during the first year you have a policy but may receive $1,200 in coverage during the second year. Benefit limitation periods differ from policy to policy and can sometimes be a good thing because they result in lower premiums. Whether you want a policy with these limits depends upon whether you need to consume the particular type of health care service above the limits during your first years of coverage.

How does extras cover affect your out-of-pocket expenses?

There is no rebate for the purchase of an extras cover policy as there is to help with premiums for hospital insurance. Still, these policies are usually relatively affordable and purchasing an extras cover policy can significantly lower the total amount you spend on health care. You pay premiums for the policy but less out-of-pocket when you visit a care provider, giving you more control over your costs.

Extras cover may provide a fixed amount for services, or may cover a percentage of the bill such as 70 percent of the costs of treatment. Many extras funds have a network of providers, called provider schemes, that help to keep costs lower. Providers who participate with the insurer agree to charge a lower negotiated price for treatments.

Should you buy a combined hospital and extras cover policy, or a combined policy?

There are separate extras cover policies that can be purchased independently or you can purchase a combined policy that has both hospital and extra cover. You should compare the costs and the coverage of each different kind of policy to decide which is right for you.

]]>Purchasing health insurance is very important for your well-being and your financial protection. Without hospital cover, you could face restrictions on care, be limited to visiting a public hospital only, and still be left with large bills if you saw any providers whose fees exceeded the Medicare benefits schedule (MBS). Without extras cover, you could be forced to pay for all of your exams and routine treatments out-of-pocket.

Not only is purchasing health insurance a way to protect your health and your finances, it is also required for individuals above a certain income level. While the Australian government mandates the purchase of hospital cover, it also provides assistance to individuals and families who need help affording their policies. This assistance comes in the form of the private health insurance rebate (PHI).

What is the PHI Rebate?

The private health insurance rebate is a rebate that the Australian government gives to individuals and families to help them afford private health insurance. Any Australian resident who qualifies to receive Medicare coverage who buys hospital or general cover (or both) and whose household income is below a certain level should be entitled to receive a rebate.

A rebate can be paid directly to an insurance company in order to reduce the premiums that you pay for coverage. The rebate can also be paid through your tax return. Regardless of which of these options you choose, the PHI rebate may cover a significant portion of your costs depending upon how much you and your family make. With the rebate, coupled with the important benefits that health coverage provides, there is no reason for anyone to go without cover.

How much do I get back?

The value of the private health insurance rebate is based upon what your household income is, as well as the cost of the premiums for the health fund that you purchase. Individuals and families are grouped into different tiers depending upon their household income. People who are married or who are in a de facto relationship will use their combined household income to calculate the rebate. This Health Insurance Rebate Calculator allows you to input your income, age, and relationship status so that you can determine the amount of your rebate.

Health Insurance Rebate Calculator

Depending on your age, family status, and income level, you may be entitled to a Government Rebate on your private health insurance policy. Use the sliders and dropdown menu below to calculate your rebate.

Step 1: Select Your Annual Income:

Step 2: Select Your Age:

Step 3: Select Your Status

Please select status

You are entitled to a 1% Government Rebate on Your Private Health Insurance Policy.

SinglesFamilies

$90,000$180,000

$90,001-105,000$180,001-210,000

$105,001-140,000$210,001-280,000

$140,001$280,001

Rebate

Standard

Tier 1

Tier 2

Tier 3

age 65

27.82%

18.547%

9.273%

0%

Age 65-69

32.457%

23.184%

13.910%

0%

Age 70+

37.094%

27.820%

18.547%

0%

The rebate pays a percentage of insurance premiums. For an individual who makes less than $90,000 per year or a family with a combined income of less than $180,000 per year, the PHI is equal to 27.82% of premium costs as of April 2015. This rebate for singles and families within this income threshold increases to 32.457% of premiums when between the ages of 65 and 69, or to 37.094% of premiums at age 70 or older.

As your individual or family income climbs, the amount you get back declines. For example, a single under age 64 who makes between $90,001 and $105,000 would only get a 18.547% rebate and would get a 9.273% rebate once his or her income was between $105,001 and $140,000. No rebate is available for singles with an income of $140,001 or higher, or for families with an income above $280,001.

Single parents and couples are subject to the family tier, rather than the singles tier. However, if families have multiple children, the threshold increases $1,500 per child for the second and subsequent children.

Who is eligible to receive the PHI rebate?

The PHI rebate applies to Australians who are eligible for Medicare coverage but who opt to purchase private insurance. Any Australian resident who buys a qualifying health policy and whose income does not exceed the rebate threshold should be eligible to receive the rebate.

If you did not purchase health insurance prior to the age of 30, you are charged an additional cost for your insurance that is referred to as Lifetime Health Cover (LHC) loading. The rebate does not apply to the LHC component of health insurance premiums. You will only receive a rebate for the standard base amount of premiums.

PHI rebates do not apply to overseas or visitors cover. However, overseas visitors who are covered under a reciprocal health agreement (RHCA) and who are eligible for Medicare may be able to obtain a rebate for the purchase of either hospital or extras cover.

How do I claim the rebate?

You have two primary options for claiming the PHI rebate. One option is to claim it by having the money paid out directly to the insurer you buy your health fund through. This will lower your ongoing premiums.

You will need to inform the insurer of the tier that you fall into so your rebate is calculated correctly. You may complete Form MS006, which is called an “Application to Receive or Change the Australian Government Rebate on Private Health Insurance as a reduced premium form.” This form is available on the website of the Australian Government Department of Human Services. You may also ask your insurer about how to obtain and complete a form so your rebate can be paid directly to the insurer.

Your other option is to claim the rebate through the tax return filed with the Australian Taxation Office. The rebate is considered a refundable tax offset. You must lodge a tax return to claim the money back. The Australian Taxation Office has detailed information on lodging a tax return on its website. The majority of people lodge a tax return, which can be done yourself using either myTax or e-tax. A registered tax agent can also assists with lodging your return and claiming your rebate.

What if you choose the wrong tier?

When you lodge your tax return, you should know your income and be able to select the correct tier when claiming your rebate. However, if you claim the rebate as a premium reduction, there is a risk that you may provide incorrect information on your income.

If you estimate your income too high and you receive less of a rebate than you should, this can be corrected when you lodge your tax return as you can claim the additional funds. However, if you estimate too low and your income is higher than expected, you will need to repay the additional rebate you received and should not have been eligible for. The tax debt must be paid at the end of the financial year, but there are no penalties for estimating incorrectly.

Do all health insurance policies qualify?

Not all health insurance policies qualify. You should ask your health fund if the policy you are considering is eligible for the PHI rebate. The policy must be a complying health insurance product (CHIP) that provides hospital treatment, general treatment (ancillary or extras cover) or both.

The PHI rebate vs. the MLS

Both the PHI rebate and the Medicare Levy Surcharge (MLS) are affected by your household income. While the Private Health Insurance Rebate encourages you to buy coverage by subsidizing it, the Medicare Levy Surcharge encourages the purchase of coverage by imposing a fine if you fail to buy hospital insurance.

The Medicare Levy surcharge is assessed only if your income exceeds a certain level. This Medicare Levy calculator can help you to determine if you will be required to pay for not having coverage. The levy kicks in once a single person has an income above $90,000 or a family has an income above $180,000. It begins at one percent and rises up to 1.5 percent for singles with an income exceeding $140,000 or families with an income exceeding $280,000.

Medicare Levy Surcharge Calculator

The Medicare Levy surcharge is an additional fee paid on top of the 2% Medicare Levy Surcharge that most Australian taxpayers pay. You can avoid the surcharge if you have Private Health Insurance (Hospital Cover).

The exact surcharge level you'll need to pay depends on your income level and relationship/family status. Use the slider and dropdown menu below to determine what surcharge you're liable for if you don't have private hospital cover.

Step 1: Select Your Annual Income:

Step 2: Select Your Life Stage

Please select status

Your Medicare Levy Surcharge is 1% of your income, or $2050

SinglesFamilies

$90,000$180,000

$90,001-105,000$180,001-210,000

$105,001-140,000$210,001-280,000

$140,001$280,001

Medicare Levy Surcharge

Standard

Tier 1

Tier 2

Tier 3

All ages

0.0%

1.0%

1.25%

1.5%

You do not want to pay a levy and be left with no coverage. Take advantage of the incentive the PHI provides and buy the cover you require to take care of yourself and your family’s medical needs.

]]>Here in Australia, we’re lucky enough to have a great public health care system in the form of Medicare. One of the main benefits of this is free public hospital treatment if you are treated as a public patient in a public hospital or subsidised treatment if you are treated as a private patient in a public hospital. This extends to women who are giving birth in the public health care system, although some women choose to use a private hospital instead. Here, we look at what you can expect in both the public and private health care system.

The Public System

Giving birth usually involves no out-of-pocket costs. Even scans and antenatal classes can be covered free of charge.

Appointments will take place at the public clinic of your local hospital. You may see a midwife for check-ups and a doctor at regular intervals during your pregnancy. GP shared care is also an option, with appointments being shared between your GP and the clinic but your GP must be accredited in obstetrics and have a special interest in the area.

You don’t have the freedom to choose your obstetrician in the public system. It is possible to elect a private obstetrician if you don’t have health insurance but this will usually require upfront payment and the full bill to be settled before you leave hospital with your baby,

You will often see different midwives or doctors for each appointment, although many hospitals are trying to introduce greater continuity of care.

Accommodation in public hospitals will usually be shared rooms. If you are a private patient in a public hospital, you will have greater priority for a single room but this depends on one becoming available at the right time and you are not guaranteed to be in your own room.

Some areas have birthing centres, with a much greater focus on a more natural approach to delivery. Pain relief is therefore kept to a minimum. Here, you may be allocated a midwife who will care for you throughout your paregnancy and during the birth but there are no guarantees on this. Many birthing centres work in small teams but there are no guarantees on continuity of care.

Birthing centres are part of the public system so there are no costs to pay but they only accept low risk patients who are not expected to have a difficult delivery. This is not an option for women wanting to have a vaginal birth after a previous caesarian delivery. Be aware that there may be costs to pay if complications occur and you need to be transferred to the main hospital.

Many public hospitals do not allow elective caesarians if there is no medical reason that requires that this needs to take place.

The Private System

Private health insurance will cover hospital accommodation, some or all of the fees for your obstetrican and paediatrician, and possibly some of the fees for using a private midwife. A lot will depend on your policy so you’ll need to take a close look at this to see exactly what you’re covered for.

Unlike in the public system, you can expect some out-of-pocket costs if you choose to use a private hospital during your pregnancy and for giving birth. Out-of-hospital expenses are not usually covered by health insurance, this includes appointments with your obstetrician, fees for an anaesthetist, tests/scans during your pregnancy and Intensive Care fees if you or your baby become seriously unwell during or after delivery. Obstetrician fees are likely to be your biggest out-of-pocket expense.

You can select your obstetrician but you won’t necessarily have complete freedom of choice. When booking into a private hospital, you have two options: a) to select a private hospital and choose an obstetrician who attends there, or b) to choose an obstetrician and book into a hospital that they attend.

In some cases, you may be required to use a private hospital that has been approved by your health fund. This could have a big impact on your choice of obstetrician.

It’s wise to ask for confirmation of what you could expect to pay if the birth does not go as smoothly as you’d hoped or if your baby needs to be admitted to hospital. These type of unexpected scenarios could add significantly to the overall bill.

You are much more likely to be allocated a single room when staying in a private hospital and your partner will often be able to stay with you. As a private patient in a public hospital, you will have high priority for a single room but there are no guarantees that one will become available.

A midwife will usually be present throughout the birth. Your obstetrican will be on hand (unless they are unavailable at the time that you go into labour) and will visit you after the birth but will not necessarily be with you during delivery. You may not have previously met the midwife before the birth and can expect several staff changes during the birth. For guaranteed continuity of care, you can choose to hire a private midwife but this will add extra to the bill.

How does this play out in reality? We asked Australian mums for their experiences in either the public or private health care systems. Here’s what they had to say!

When we were getting ready to start a family, it was very important to my husband and I that we were able to choose an Obstetrician we liked and felt that we could trust to look after both myself and our babies. Top private health insurance can be expensive but we made it a priority in our budget and in the early days, we most likely missed out on other things in order to be able to afford it.

We are very thankful that we made that decision as we were extremely happy with the level of care we received by both our obstetrician and the private hospital. I ended up having to have C-sections for both of my deliveries, so it was very comforting to have my own doctor able to perform them. I was able to stay in hospital for a full five days after each C-section, in a private, comfortable room with friendly nurses caring for me and my children. I had a few little complications with each of my pregnancies that could have been dangerous to my babies and myself, so having a doctor that knew my history was incredibly important and helped maintain our health and safety in those situations.

If we ever decided to have more children, we would definitely be choosing to use the private health system again.

I had my first child through the public system. We fell pregnant quickly and our health cover waiting period hadn’t quite kicked in. The service through the public hospital was fantastic and I had a very positive birth experience. Because of that, we chose to use the public system again when I had my second child. Sadly, our second son died suddenly and unexpectedly when he was only two weeks old.

When I fell pregnant again, I was extremely anxious and felt that I needed more reassurance that the public system could offer. I saw a wonderful obstetrician under the private model. The birth experience itself was quite similar between public and private – the care I received was faultless in both instances.

The pre-natal care was very different. Under the public model I never saw the same midwife twice. I often waited up to an hour for my appointment, which was then generally hurried through. My pregnancies were completely uncomplicated, so this wasn’t really an issue but I certainly didn’t get a chance to develop a relationship with any of my pregnancy caretakers. Under the private system, I saw my obstetrician on a monthly and, towards the end of the pregnancy, weekly basis. We developed a relationship and he was very sensitive to my situation. He offered me scans whenever I wanted them and buckets of reassurance. He gave me his personal mobile number and when I was feeling incredibly stressed about my pregnancy, he was open to inducing labour at 37 weeks.

I think we are fortunate to have such wonderful medical care available under both the private and the public models, but for any anxious or complicated pregnancies, I would definitely recommend the private system. If that isn’t an option due to cost, a shared care model with your GP can offer that solid relationship and support that can be so important during pregnancy.

I gave birth to all of my six children in the public health system. My only out of pocket expense was my 12 week ultrasound in later pregnancies, which was no longer covered by the public system. I had one child naturally, followed by five C-section deliveries.

While each birth was different and all had their pros and cons, my preference for the public system was a fine choice for me. During the course of my pregnancies I was able to see many different midwives or I could settle for just a few. I liked this model of care as I always felt my medical state was thoroughly monitored and quite safe; something that’s important to an expectant Mum!

Sometimes I was in a multi-ward during my hospital stay and other times, I was lucky enough to have a private room, which was lovely. I wouldn’t hesitate to return to a public hospital service if I were to continue having children. I felt safe and protected under our wonderful health care system.

My pregnancy and birth care for both my daughters was through the private healthcare system. Seeing the same doctor throughout both pregnancies was fantastic, it allowed me to become really comfortable with my specialist and I felt like I was in safe hands. My hospital experience was just as positive, with the midwives and staff providing me with such great care during birth and after! If we chose to have another baby, I would definitely take the private option again.

I have had three children and had a different hospital experience with each. My first two were born in the NHS system in a UK hospital and my third was born in a private hospital in Sydney. Although the care was very good for all three of them, there was a clear difference between public and private. The extra attentions to detail and care that I received in the private system really blew me away. If money was not an option and I had the choice, I would most definitely go private again.

As a mother of three, I had various experiences with pregnancy and post-natal care in both public and private hospitals. My first two children were delivered in the public system while I had my third under the care of an obstetrician in a private hospital. If money was no object I would certainly use the private system again as it was a more personal and supportive experience. Having the care of the same obstetrician during my pregnancy was very reassuring and knowing she would be there for the birth gave me confidence as I had had two traumatic births beforehand. I was also able to access consistent and specialist lactation advice which allowed me to breastfeed for a little longer than I had been able to previously.

I do want to note that as a country we are so lucky to have the public system there to support all women and they were there for me when my middle daughter was born premature and requiring neonatal intensive care. However, in my experience, public hospital maternity wards and facilities are under-resourced and not quite as supportive as private hospital units, particularly in important aspects such as breastfeeding support and post-natal mental health. It is definitely harder to make meaningful relationships and gain confidence and trust in a revolving roster of nurses and specialists who don’t always provide consistency in advice.

During my first pregnancy it had never occurred to me to be giving birth anywhere but a hospital. To be honest, I hadn’t really thought about it.

The idea of health insurance for pregnancy and birth wasn’t top of mind either; I was fit, healthy, prepared and I didn’t anticipate any problems with either the pregnancy or the birth.

We did, however, have a level of hospital cover for both. It is something I am extremely grateful for. Mostly, I liked the consistency in the obstetrician I was seeing. Seeing the same person each appointment, and the familiarity was something that helped keep me calm and relaxed (although I would also stress that if you don’t “click” with your Ob, go find another one).

He also got to know my concerns, anxieties, and likes, which enable him to manage the birth component of my pregnancy, for which I am most thankful for. The birth did not go well and resulted in an emergency C-section, and having that familiar face, who knew my worries, and whom had provided me with a consistent manner the previous 9 months helped me in that moment.

I was also afforded the full almost week long stay in a private room; with a large family of in-laws, this was more of a benefit to others than myself, but it also allowed me the opportunity to deal with the emotional trauma of the birth in a quiet space.

Although I have great respect for the public system, for me personally seeing the same person throughout was what put me at the greatest ease. The rest was all just a bonus.

My first birth experience was through the public system. At the time, we did not have private health insurance and it was an expense we did not feel was necessary at the time. The waiting times for appointments could be lengthy sometimes, however all the doctors and midwives I saw from pregnancy to post birth were wonderful and supportive, with the benefit of bringing different expertise than a single midwife throughout would have offered.

We are now due for baby #2 in a couple of months and while we have private health insurance, we chose not to go for full pregnancy cover, again going through the public system. While the appeal of a private room is there for private cover, that is the only benefit that we feel we are lacking with the public system. Out of pocket expenses in the public system are much less and as a mostly stay at home mum these days, less spending is preferred.

We have made one change this time, with our share care services provided through a private midwifery program linked to the hospital rather than the GP. The out of pockets after the Medicare rebate are still lower than the GP and the specialised care is much better. If finances were not an issue, going through their complete birthing program would be preferred over either a public or private hospital.

I had a child in a public hospital, which I couldn’t fault at all. I had got to meet lots of the doctors and midwives at my hospital check ups during pregnancy, there were lots of free classes that you could attend, you could do a tour of the hospital before hand and there seemed to be lots of staff available. There was a private bathroom for that room so I was lucky enough not to have to share.

In a private hospital I only had my obstetrician to consult and although I trusted him completely, I did enjoy the conversation and opinions of diversity that I got from the public system. Having your own Obstetrician has its benefits- if I needed an unscheduled appointment, it was done asap (when he wasn’t actually delivering babies) and he was available to consult and knew me and my pregnancy thoroughly. I felt completely at peace and reassured that he knew what he was doing and we were in complete care whereas the public system is a bit luck of the draw when you actually give birth. The midwives although there seemed fewer in number but I seemed to have the same midwives call on me their whole shift so although there was less, it was the same person throughout. I don’t remember the same free services and classes being available in the private system but the hospital was more private and quiet and it certainly felt more comfortable. I had a fridge and larger room and bathroom. I did have to take my baby to nursing quarters to bath and although that was great that the midwives were there to assist if you needed it did prefer the bonding moment with my baby that I had when bathing in my room.

I had a positive experience in both systems. I felt cared for in both systems and it would just be a reassurance of staff and doctors that I would tend to go private again. Although I don’t intend to have another, if I did I would go private again just so it didn’t cross my mind to worry who was going to be there and the peace and quiet of the private hospital is worth it as I know too well that the peace and quiet is never like that again when you get home!

For both my babies I went through a birth centre in a public hospital and had wonderful care by a small team of midwives both times. Birth Centre care differs from the usual public hospital model in that the focus is on a natural birth under the care of known midwives in a homely environment, but with all the medical care of the normal birth suites just down the hallway.With my first birth I needed to be transferred to the birth suites, but my birth centre midwife was with me the whole way through which was a great comfort to me. My second birth was very straight forward and I was able to stay in my birth centre room throughout and after both my births, my husband and I were able to bond with our baby in the queen size bed with our baby. It was amazing to receive this level of care with no out of pocket expenses.Another advantage of the public system for me was the care available, free of charge, for my son when it was found he had facial paralysis on the right side of his face a few hours birth. This needed further investigation by a number of different specialists, including a neurologist, ophthalmologist and physiotherapists. These specialists were able to visit from the nearby children’s hospital and after we were discharged we continued to see these specialists regularly, again at no cost to us. It was a very stressful time, but I am grateful for the care we received through the public system. If we went through a private hospital there would have been significant out of pocket expenses, which would have been added stress to an already difficult time.

]]>Purchasing private health insurance limits out-of-pocket costs and gives you broader choices than Medicare coverage. If you are legally married, in a registered relationship or living in a de facto relationship, you have the option of either purchasing singles’ policies or purchasing a couple’s policy. There are advantages and disadvantages to each option and you need to carefully shop around for the health insurance fund that is right for you.

Couples vs. Singles Health Insurance Policies

Couples in a homosexual or heterosexual marriage have the option to purchase couple’s health insurance coverage, as do individuals living together in a de facto relationship. A couple’s policy refers to one private health insurance policy that covers both partners. Each member of a couple may also purchase his or her own single’s health fund coverage instead of purchasing couple’s coverage.

You can choose a policy with a combined annual limit so each partner can select the extra services of his choice. For example, one spouse could get dental treatment and the other mental healthcare services or occupational therapy.

Couples policies often have more extensive coverage for family planning needs. Lower-cost singles’ policies may exclude cover for things like fertility treatments or pregnancy services. You can choose a couple’s policy that includes these extras.

When Do You Become a Couple for Health Insurance Purposes

In Australia, you are eligible for couple’s health insurance coverage provided that you are:

Married

In a registered opposite sex or same sex marriage

In a de facto relationship

A de facto relationship exists any time two unmarried and unregistered partners live together in a romantic relationship. There is no minimum time period that you must live together before you are viewed as being in a de facto relationship.

The Australian government provides a rebate to most individuals who purchase private health insurance coverage. This rebate is income tested. If you are in a registered relationship, are married or in a de facto relationship, you will be subject to the family tier limits rather than the singles limits when determining your income for purposes of rebates.

A levy surcharge is also assessed on Australian taxpayers who make above a certain income and who do not have private hospital coverage. Married and registered partners as well as people in a de facto relationship must combine their incomes and are subject to family tiers for purposes of assessing their Medicare levy surcharge.

Couples’ Policies and Age Loads

The Australian government has a system in place called Lifetime Health Coverage, which is designed to encourage young people to become insured.

If you have purchased private coverage prior to age 30, you can lock in a lower rate. If you do not have coverage prior to age 30, you are subject to two percent age loading for each year over 30. For example, if you are 35 when taking out coverage for the first time, you would incur a 10 percent age loading cost.

It is common for partners to be different ages and have different insurance coverage histories. If either party is over 30 and has not had prior coverage, the age load cost must be considered when taking out a couple’s policy.

The age loading of each spouse or partner is averaged when a joint policy is purchased. For example, if the wife purchased insurance at age 25, she has no age loading. If the husband purchased insurance at 35, he has a 10 percent age load cost. When the couples policy is purchased, the spouses have an average load of five percent and will pay five percent above the base premium rate for shared coverage.

The age load is dropped after 10 years of continuous coverage, so the average load for the couple will need to be recalculated when this milestone is reached.

Your Life Stage and Your Couple’s Coverage

When purchasing couple’s coverage, the needs of both individuals need to be taken into account. These needs can change as you both age and experience life milestones.

Younger couples often look for coverage for obstetrics, fertility treatments and pregnancy. Premiums for policies covering pregnancy services may be higher and this coverage can be dropped once you have had children. Most funds have a 12-month waiting period for pregnancy coverage, so planning ahead is essential if you are thinking about starting a family.

After children leave home, you can return to a couple’s policy. For senior couples, pregnancy coverage is no longer necessary. Extras that senior couples may look for include hearing aids; chiropractic care; and home nursing care.

Each partner’s individual medical needs may differ, so couples should look for policies that have a combined annual limit and that permit each spouse to select the extra coverage of his or her choosing.

Pregnancy and Family Coverage

Medicare provides coverage for pregnancy only in public hospitals. A referral is required for Medicare to provide pregnancy coverage.

Private hospital cover provides broader coverage for pregnancy and birth-related services. However, some lower cost funds pay only restricted benefits that cover private patients in public hospitals. If you want to have your baby in a private hospital, you must look for a health fund policy that provides this coverage.

Pregnancy coverage can be purchased as part of a single’s policy or as part of a couple’s policy. Not all policies for either singles or couples offer obstetrics cover.

All health insurance funds have a 12 month waiting period before providing any type of coverage for pregnancy. This means you must have coverage for obstetrics treatments well before you fall pregnant.

Insurance with obstetrics cover generally provides payments only for pregnancy-related treatments and does not pay for medical care for the infant. Healthy babies are not formally admitted to a hospital so no charges are raised for the babies care. If the baby requires any treatment, however, he or she may be admitted as an in-patient and charges will apply.

For parents who have twins or multiple births, at least one baby is formally admitted to the hospital as a matter of policy. This results in excess costs unless you have family coverage.

Switching to family coverage before the baby is born is advisable to protect your finances in the event that your infant incurs unexpected medical costs. Most funds require switching to a “family” level policy between one and three months prior to the birth of the baby. However, some require you to switch to a family level as early as 12 months before giving birth to provide coverage for congenital conditions.

Does Pregnancy Cover Provide Coverage for Fertility Treatments?

Not all policies that provide obstetrics cover offer coverage for assisted reproduction treatments like in vitro fertilization (IVF). Even when IVF is covered, typically only aspects of the treatment requiring admission to a hospital are paid for by hospital insurance. IVF treatment has multiple steps, many of which do not require hospital admissions. These outpatient treatments often need to be paid out of your own pocket.

The standard waiting period for IVF coverage is 12 months; however some policies impose a waiting period of up to three years.

Tax Implications for Couples Insurance

Health insurance rebates are available from the government to assist with the payment of private health coverage premiums. Becoming a part of a couple affects your eligibility for health insurance coverage rebates.

The amount of your health insurance rebate is based on your income and there are different income thresholds for individuals versus couples. Anyone who is married, in a registered relationship or living in a de facto relationship is subject to family tiers. It is important to understand that living as a couple may affect your ability to claim rebates. Rebate income limits for individuals and families are as follows:

Singles
Families

$90,000$180,000

$90,001-105,000
$180,001-210,000

$105,001-140,000
$210,001-280,000

$140,001$280,001

Rebate

Standard

Tier 1

Tier 2

Tier 3

age 65

29.04%

19.36%

9.68%

0%

Age 65-69

33.88%

24.20%

14.52%

0%

Age 70+

38.72%

29.04%

19.36%

0%

Australia also charges a Medicare levy surcharge on higher income individuals who do not purchase private hospital insurance coverage. Individuals who are living in a couple relationship must use the family tier to determine if they are subject to a surcharge based on their combined income:

Unchanged

Tier 1

Tier 2

Tier 3

Singles

$88,000 or less

$88,001-102,000

$102,001-136,000

$136,001 or more

Families

$176,000 or less

$176,001-204,000

$204,001-272,000

$272,001 or more

Medicare Levy
Surcharge Rate

0%

1%

1.25%

1.5%

Your rebate your obligation to pay a surcharge may change when you go from being single to becoming a member of the couple. Be sure to calculate your combined income and review both the limits for rebates and the income thresholds for the surcharge.

]]>http://healthinsurancecomparison.com.au/health-insurance-for-couples-guide/feed/0Ambulance chasing How to get the best from the ambulance-cover markethttp://healthinsurancecomparison.com.au/ambulance-chasing-how-to-get-the-best-from-the-ambulance-cover-market/
http://healthinsurancecomparison.com.au/ambulance-chasing-how-to-get-the-best-from-the-ambulance-cover-market/#commentsMon, 15 Dec 2014 01:59:21 +0000http://healthinsurancecomparison.com.au/?p=2823
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]]>Ambulance coverage is something most Australians will have to deal with at some point, since treatment and transport by ambulance is not covered by Medicare. And depending on where you live you will at some point in your life be forced to decide whether and how to get covered for it.

Although each state either runs its own ambulance services or contracts to private companies like St. John’s Ambulance, charges and coverage for the service vary significantly (see table). So we’ll need to break the landscape down first state-by-state and then cover some of the coverage issues themselves.

First, here’s the good news. Although ambulance fees charged to the uninsured can be frighteningly expensive (up to $5,000 per trip in some states), ambulance coverage can be bought surprisingly cheaply. Depending on the state you live in, you can buy yearly ambulance coverage directly from the provider or indirectly through a private health insurer for about $100 per family. And that’s before the 30% rebate paid by the government on all private health-insurance policies.

The lucky country’s lucky states

As with most aspects of Australian life, geography is everything. If you live in either Queensland or Tasmania, you do not have to bother yourself with ambulance coverage. That’s right – state taxpayers pick up the tab for all state-run ambulance services for all residents whether in-state or out of state. Until recently, Queenslanders paid for the service through a Community Ambulance Cover Levy of $24 per quarter but this charge was scrapped in 2011.

That is generous considering the cost of an ambulance ride can vary from an estimated minimum of around $500 up to more than $12,000 (Victoria’s maximum) for ambulance services. Air ambulance services – a more familiar sight in rural Queensland than most other parts of Australia – cost $5,000 per trip upwards.

The not so lucky six

Short of moving to one of the lucky states, residents of the other four states and two territories face a mixed bag of ambulance-coverage choices and regulations (See table). The good news for pensioners and other government-benefit recipients is that in all six jurisdictions they receive free ambulance transport and services courtesy of the state taxpayer.

To take advantage of this, claimants must provide proof of enrolment (depending on the state) in Federal or State programs assisting:

Military veterans

Pensioners/the elderly

Low income health care

Children in care

The somewhat-lucky two

In both New South Wales and the Australian Capital Territory, all private health-care policies must include ambulance coverage, funded by a levy. Residents of these two states essentially get ambulance cover automatically whenever they buy their hospital or combined coverage. However, they need to check on what each policy allows and excludes.

The other four

In Western Australia, South Australia, Victoria and the Northern Territory, The government does not mandate that ambulance coverage be included as part of regular private health insurance. So customers who want it must either shop for a policy that includes it, buy it separately or subscribe directly to either the state-run ambulance service or private contractor. Note that direct subscription to the ambulance service is not available in NSW or the ACT.

Private ambulance coverage: the four things to watch for

Emergency vs. non-emergency

Exclusions

Out-of-state coverage

Air ambulance

Emergency vs. non-emergency

Ambulance services charge more for call outs to emergency vs. non-emergency cases, charging fees ranging from $200 for non-emergency in SA compared to $1,645 for an emergency in Victoria. Air ambulance charges in Victoria, the only state that posts such fees, range from $1,977-$4,651 for fixed-wing aircraft and $9,946 for helicopter transport.

Exclusions

In nearly all private ambulance policies, some ambulance transport is not covered. For example, most policies exclude ambulance transportation between hospitals and other health-care facilities or from hospital to the patient’s home. Others will also put a cap on how many ambulance visits a policyholder is allowed per year. Most private ambulance policies also have a seven-day waiting period.

Out-of-state coverage

Whether policyholders are covered when interstate depends on whether there is a reciprocal arrangement between the state the transport occurred in and the state the patient is a resident of. Non-pensioner residents of NSW, for example, are not covered in Queensland and South Australia unless the ambulance ride returns them to NSW, but are covered by reciprocal arrangements with the other states and territories. In NSW, for example, these arrangements mean patients will be charged for 51% of the actual ambulance cost so they will need coverage for the remainder as well. Check these arrangements before buying a policy.

Air ambulance

Australia’s outback-based air ambulance service is iconic but national symbols don’t come cheaply. Most such services fly patients from remote outback locations to local hospitals, but in recent times the more common usage has been flying patients by helicopter onto rooftop landing pads of major city hospitals.

Air ambulance charges in NSW for both fixed wing aircraft and helicopters are capped at $5,715 per call-out. In Victoria, smaller in both area and population, the charges are $1,977 per fixed-wing aircraft transport to a hospital up to a whopping $9,946 for helicopter transport.

Ambulance-only cover

Since Medicare doesn’t cover ambulance charges, Australians who rely only on Medicare for their health-care coverage can buy ambulance-only coverage. This is, in effect, a subscription fee to the state-run or state-contracted ambulance service and can be bought purchased directly or through a private health-insurer. In NSW and the ACT ambulance cover must be purchased with all private cover whereas in VIC, WA, SA and the NT it can also be bought directly from the ambulance service itself (see chart 1)

The typical cost of an ambulance-only policy in most Australian states on average is surprisingly cheap – around $50 per person or $100 per couple. Private ambulance-only cover is priced similarly to the direct subscription fees to the ambulance service. Remember that the couples rate includes children, so kids get a free ride at their parents’ expense (as usual).

Remember the rebate

The Federal government’s variable rebate of about 30%, expressed as a lowered annual premium, applies to all privately-purchased ambulance cover. This cuts the price of such coverage for a family with children to a very affordable $70 annually – about $6 per month.

]]>Entering your thirtieth year can mark a major milestone in the progress of a lifetime. In Australia, reaching that mark often includes making key decisions about private health insurance (PHI) for singles, couples and young families.

The interwoven threads of financial incentives and disincentives to taking out private health insurance (PHI) in Australia are often confusing to many young people. The segment of the population under 35 is the least likely to require health care and therefore most likely to ignore PHI and rely on Medicare as their insurance of choice. Young people may still be hospitalized. Check out this chart of hospitalizations by age.

Nonetheless, young Australians who are about to or have just turned 30, whether single, married or starting a family, who have not taken out private health cover will need to confront three major issues going forward – see Table 1. We’ll look at each in turn

Financial incentives for young Australian adults to join the PHI system

Incentive

Penalty/Reward

Group affected

LHC Loading

2%/year acc. fee

2%/year acc. fee

Medicare Levy Surcharge

1.5-2.5%/year fee

Incomes $90,000+

Lifetime Health Cover (LHC) Loading

The most important financial incentive to joining the PHI system by the time you reach the age of 31 is to avoid paying the LHC Loading. This tax kicks in when the taxpayer reaches age 31 and grows steadily thereafter, reaching a maximum of 70% after 35 years (age 65).

LHC Loading is an extra tax of 2% on top of your basic hospital-coverage premium for every year over the age of 31, beginning on June 31 the year after your birthday, that you do not have that coverage. In other words, if you do not start paying for hospital coverage until you are 36, you must pay an additional 10% above your premium for the 5 years above 31, multiplied by an accumulating 2% per year

Key facts:

Full name: Lifetime Health Coverage Loading (LHC Loading)

Kind of PHI affected: Hospital coverage

Effective at: Year beginning June 30 after your 31st birthday

Tax rate: 2% of premium for each year over 31 not covered, added together

The point of LHC Loading is to encourage Australians to buy into the PHI pool when they are younger rather than free-ride in their youth and then buy in when they are older and more likely to use the system. It is a powerful incentive for Australians to take out PHI at a younger age, especially when added to other incentives.

However, the demand from younger Australians for lower-cost policies has led to a growth in so-called basic coverage PHI policies. These bare-bones plans typically offer the minimum amount of coverage prescribed by law and exclude certain types of medical services, including some commonly used by younger people – see Table 2.

Table 2 – Typically excluded treatments in basic PHI coverage

Assisted reproduction and IVF

Obstetrics and birth-related care

Non-cosmetic plastic surgery

Gastric banding and obesity surgery

Psychiatric care

Rehabilitation

Couples in their early thirties thinking about starting a family, for example, should bear in mind that bare-bones basic-coverage policies typically exclude all reproductive and obstetric care, as indicated in the table.

Medicare Levy Surcharge and Private Health Insurance Rebate

A further incentive for younger taxpayers at higher income levels to buy PHI is to avoid paying the Medicare Levy Surcharge (MLS) while receiving the Private Health Insurance rebate. Each begins to impact the taxpayer at income levels around $90,000 per person.

2) Private Health Insurance Rebate

Taxpayers must pay the MLS beginning at incomes of $90,000 annually if they do not have PHI and thus rely solely on Medicare. This acts as an incentive on taxpayers to take out private hospital cover and thus avoid paying the levy.

Medicare Levy Surcharge Calculator

The Medicare Levy surcharge is an additional fee paid on top of the 2% Medicare Levy Surcharge that most Australian taxpayers pay. You can avoid the surcharge if you have Private Health Insurance (Hospital Cover).

The exact surcharge level you'll need to pay depends on your income level and relationship/family status. Use the slider and dropdown menu below to determine what surcharge you're liable for if you don't have private hospital cover.

Step 1: Select Your Annual Income:

Step 2: Select Your Life Stage

Please select status

Your Medicare Levy Surcharge is 1% of your income, or $2050

SinglesFamilies

$90,000$180,000

$90,001-105,000$180,001-210,000

$105,001-140,000$210,001-280,000

$140,001$280,001

Medicare Levy Surcharge

Standard

Tier 1

Tier 2

Tier 3

All ages

0.0%

1.0%

1.25%

1.5%

Extras Insurance

This refers to areas of PHI that are not typically included under the basic hospital coverage demanded of the incentives programs. Consumer-information outlets like Choice typically recommend that consumers buying PHI for tax purposes only should not include extras policies, since these are not considered for tax purposes. In addition, extras insurance typically only covers part of the cost of services like dentistry and optometry.

Nonetheless, for couples in their early thirties who may be considering starting a family, avoiding extras insurance might not be a wise choice. Extras insurance will, for example, cover portions of some pregnancy and birth expenses not covered by most hospital plans.

Even better, once children are born they are automatically covered by their parents’ extras insurance and some insurance policies offer no-gap (no-copayment) coverage for children. Any parent with growing children these days knows the strain that children’s dental expenses, in particular, can place on a family’s budget.

Action plan

Avoiding the LHC loading of 2% per year accumulated is as good a reason as any for Australians who have entered their 30th year to buy private health insurance especially for anyone earning (or likely to earn) more than $90,000 per year. This is because it will remove the Medicare Levy Surcharge of 1% applied at this income level. It is important to remember that PHI Premium costs are also subsidized by the government.

For couples of this age at this income level ($180,000 combined) who have or are considering having children, there are further incentives not only to buy insurance, but to buy so-called Extras coverage as well. Although the cost of such insurance is not subsidized, it (partially) covers reproductive, pregnancy and obstetrics services that are not covered by basic hospital plans. It also includes free coverage for children in potentially-expensive areas like eyesight and dental services.

Bottom line: Unless you plan to live on schoolteacher salaries all your life (or lives), you will definitely need to buy PHI. And if you plan on having children, best make that a comprehensive policy that includes both hospital coverage and extras insurance.